When a developer launches a crowdfunding project they are asking potential backers to trust that the money they pledge will not be wasted and promised rewards will be delivered. And when a big project gets canceled and takes all the money with it, questions obviously get asked about crowdfunding in general.

That’s what’s happened this week with news that Neal Stephenson’s motion-controlled sword fighting game Clang has officially been canceled. In the process, Stephenson’s team managed to spend all of the $526,000 raised on Kickstarter as well as taking a year hiatus before deciding to finally throw in the towel.

The Kickstarter campaign ran in 2012 and required $500,000 to meet its funding goal. The project was certainly ambitious, but it had well-known sci-fi writer Neal Stephenson behind it, and ended up raising $526,000. The project was a go, but 12 months later Stephenson announced all the money had been spent and the project was being put on indefinite hold. The main reason given being that the cash raised funded a prototype and no investors had been found for the full game.

A year on and Stephenson has posted a final update on Clang’s Kickstarter officially canceling the game. He admits his and the team’s focus were in the wrong places and new ideas entered the fray–a problem often repeated when developing a game that ultimately leads to failure.

Around $700 of refunds have been carried out to those backers who asked for them. Everyone else has been asked to opt-in to a REVERB list so they get future updates. Stephenson says other projects are in the works and that Clang backers will get bonus rewards on them, but there’s no guarantee any of the projects will ever get made or that they will have those bonus rewards.

When you sign up to back a Kickstarter project you are taking a risk with your money. I think many people don’t realize this and assume the project will deliver what it promises (many do). Either that or the pledge amount is low enough that you don’t mind losing the money. I think the rule of thumb with crowdfunding projects is that if it looks too good to be true, it probably is. In the case of Clang it was a very ambitious project, too ambitious.